PM says manufacturing sector needs to perform much better

Prime Minister Manmohan Singh today said the manufacturing sector needed to perform much better and its share in the gross domestic product (GDP) must be raised from the present "unsatisfactory" level of 15 per cent.

 

"The Central Public Sector Enterprises (CPSEs) have a significant presence in areas such as machine tools, heavy transport, earth moving and mining equipment, shipbuilding, defense equipment, aerospace, heavy electrical equipment and nuclear power generation. I would urge the Central Public Sector Enterprises in these areas to embark upon ambitious plans of expansion to make the target of 12 to 14 per cent growth in the manufacturing sector a living reality," he said after giving away the MoU and SCOPE awards at a function here.

 

Singh said the Government stood committed to a strong public sector in the country and stressed the need for both public and private sectors to work together and complement each other to meet the demands of the rapidly growing economy.

 

He said the country needed huge amounts of investment, both public and private, particularly in the area of infrastructure. Public investment was particularly needed at a time when the country is facing a difficult global environment, and looking to domestic drivers of growth, he said.

 

"I am extremely happy to learn that 17 of our largest CPSUs have committed to investment plans amounting to Rs 1,40,000 crore in the coming year. I would encourage the remaining Central Public Sector Units also to similarly pay attention to boosting the capital investments. These efforts must also be properly reflected and rewarded through the MoUs," he said.

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Singh said investment is CPSUs was concentrated mainly in manufacturing, mining, electricity and services.

 

"According to the Public Enterprises Survey (2009-10), the turnover of both the manufacturing and mining sectors declined in 2009-10 over the previous year. This is a reflection of the difficult economic environment that we face. Notwithstanding these difficulties, we must step up our performance in mining, particularly in the production of coal, petroleum and natural gas. The policy on acquisition of raw material assets abroad has been approved by the Cabinet recently. I would urge our Central Public Sector Units, especially those in the field of the mining, to seriously explore opportunities for such acquisitions," he said.

 

Singh said CPSEs had borne a very large share of the responsibility of industrialisation of the economy in the formative decades after 1947 and they remained critical to the processes of nation-building even today.

 

"The number of CPSEs which was 5 on the eve of the first Five-Year Plan stands today at 250 today. They have amongst them the largest turnover company of India in Indian Oil Corporation Limited, the most profitable company in the Oil and Natural Gas Corporation, the largest public utility company in National Thermal Power Corporation and the company with the highest market capitalization in the Coal India Ltd. Some of these companies figure in the 500 biggest companies of the world," he said.

 

He said the Government remained supportive of those public sector enterprises which need assistance to become viable again.

 

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"The Bureau for Reconstruction of Public Sector Enterprises was set up in December, 2004, and since then revival proposals of 43 CPSEs have been approved. It is a matter of satisfaction for all of us that 24 of these CPSEs have posted profits, and 13 of them have turned around, that is, they have been in profit continuously for three years or more," he said.

 

Singh said that, to stay competitive in these times of rapid change, the CPSEs needed to focus on good corporate governance, strategic planning, innovation, Research & Development, and pay greater attention to quality control. They should also have the required functional autonomy, he said.

 

He said the Government had also been periodically looking at the need for reform in the functioning of the CPSEs. The introduction of the MoU system was the result of such an examination. This was followed by the conferment of the Navratana and Maharatna status upon certain Public Sector Enterprises, with greater delegation of financial powers.

 

"But, we cannot be satisfied with the status quo. Our government will do whatever is required to make the CPSEs stronger and more competitive," he added.

 

NNN

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